Obama takes steps to boost biofuels

By Anna Austin

Posted February 3, 2010, at 6:55 p.m. CST

The biofuels and biomass industries received nothing but good news Feb. 3, with the release of the long-awaited renewable fuel standard (RFS2) final rule, the first report generated by President Barack Obama's Biofuel Interagency Working Group, and the Biomass Crop Assistance Program proposed rule .

U.S. Secretary of the Interior Ken Salazar, Agriculture Secretary Tom Vilsack, Energy Secretary Steven Chu, U.S. EPA Administrator Lisa Jackson and Assistant to the President for Energy and Climate Change Carol Browner participated in a conference call to discuss the energy announcements following a meeting with President Obama, Vice President Joe Biden, and a bipartisan group of governors from across the country.

During the conference, Vilsack pointed out that historically, government agencies such as the USDA and EPA have been duplicating efforts for similar but different energy-related projects, rather than collaborating. The first task force report encourages interagency cooperation, he said, while clearly delineating responsibilities in order to concentrate and leverage resources.

The report also recognizes that one size does not fit all, Vilsack added. "So every region in the country will able to participate in a biofuel future to create jobs and economic opportunity, particularly in rural communities," he said. "It lays out necessity focusing on a regional approach, each region of the country playing to its strengths." Obama's FY2011 budget will develop five regional feedstock research and demonstration centers that will partner universities, industry and other federal and state agencies, tribal nations and internationals, to accelerate research and development in second- and third-generation feedstocks, and the implementation of a supply chain that will allow the U.S. to get new biofuels to market as quickly and sufficiently as possible.

"One issue we face in connection with promoting biofuels is encouraging production of feedstocks," Vilsack said. "So many [people] have been waiting for the proposed rule as it relates to the BCAP program. We believe [BCAP] is an essential component to our national biofuels and renewable energy policies, and needs to be designed to reduce financial risks for farmers, ranchers and forest landowners who want to invest in and establish production of nonfood, non-feed biomass. BCAP will address the ‘chicken or egg' dilemma that has stalled biomass growth in this sector, and we believe we have fashioned a rule that has sufficient flexibility to ensure technology neutrality. Cellulosic feedstocks, woody biomass, energy cane all need to be and will be explored with the BCAP rule."

Vilsack also said the interagency group believes the rule addresses concerns expressed by the wood industry, by proposing a prohibition on wood waste and residues not just on federal land but also nonfederal land, that otherwise might be used for higher value products. "We're also putting forward a number of alternatives for matching payments to biomass suppliers to make sure that those funds are targeted to biomass that contributes to an increase in the baseline use among current biomass conversion facilities," he said. "The public has 60 days to comment on proposed rule, and we will incorporate those comments into the final rulemaking process."

Jackson discussed the changes to the RFS2 ruling, while ensuring it will create many new jobs, particularly in rural areas that have been hit hard by the economic depression, and also help farmers by creating new markets for agricultural products. She estimated the rule will result in an annual $13 billion increase in income for U.S. farmers by 2022.

The RFS2 is an effort to reduce greenhouse gases (GHG), Jackson said, and there has been reasonable worry that with the life-cycle impacts of switching to renewable fuels there may not be reductions of GHGs, or that even more carbon emissions may be generated. "To address those worries, the EPA used the soundest available science that has evolved in response from questions and concerns from a number of stakeholders, and employed a full life-cycle analysis to track GHG emissions for biofuels production and use including land use issues," she said. "Using this, [with RFS2] we've estimated a reduction of carbon emissions to the equivalent of taking 27 million cars off the road annually by 2022."

Jackson concluded by emphasizing that the interagency group wants to send a positive, specific and direct message that the Obama/Biden administration is highly supportive of the biofuels industry, sees a tremendous opportunity for growth and expansion of that industry, and is committed to making it happen.

Novozymes, a company that develops enzymes and is currently building a production facility in Nebraska, applauded the government for its efforts to expand ethanol production. "The new commitment made by President Obama will significantly help grow and advance development of biofuels in the U.S., and at the same time create thousands of new green jobs," said Steen Riisgaard, CEO of Novozymes. "The new RFS2 is a strong framework and by moving to E15 and increased accessibility of E85, the biofuel industry can create more long-lasting, high earning jobs that will help transform the way the U.S. and world use and consume fuel. And at the same time lessen U.S. dependence on foreign oil."